Was it another Coinbase? Was it an exchange with bank-like features? Was it some entirely new system built on the blockchain? Apart from a few general hints, Allaire seemed more than happy to keep outsiders guessing until the company was ready for launch.
That time has come. In a blog on the company’s website today, Jeremy Allaire and Sean Neville spell out exactly what Circle is, and how it will help bitcoin finally break into the mainstream.
The short version goes something like this: Circle is a free service to store, send and receive bitcoin. It allows users to deposit any local currency into bitcoin, withdraw bitcoin back out into local currency, and send bitcoin/currency anywhere in the world. All for free.
According to the company’s blog, the aim is to make the transactions as simple and user-friendly as possible:
With Circle, rather than buying and selling bitcoin, customers can create an account, send and receive money, and make deposits and withdrawals. When you deposit, Circle can instantly convert your fiat currency into bitcoin and store it. When you withdraw, Circle can instantly convert your money from bitcoin back into local currency and transfer it to a bank. Our goal is to make it easy for consumers to deposit and convert currency into a digital form that they can then use globally and instantly, not offer a trading exchange where they can bet on a speculative asset.
How is this different from existing services like Coinbase or BitPay? The major difference seems to be in approach rather than features. Instead of “buying” and “selling” bitcoin, users are simply depositing cash into bitcoin-backed accounts and withdrawing cash from them. The goal is to give bitcoin as it exists today real-world value, rather than speculative value. And by working with existing credit card and banking systems, it hopes to remove massive amounts of friction and cost from the economic system.
According to the promotional video accompanying the post, Circle will allow near-instant deposits and withdraws from credit and debit cards. In principle, this would eliminate the multi-day waiting period common to Coinbase and BitPay payments. How this will work in practice with a variety of banks and services is still unknown.
New users in the closed beta are also being given $10 worth of bitcoin when they sign up.
There are some additional differences, although just how relevant these are in the long term is open to debate. The company claims to have: an extremely friendly, cross-platform interface; the ability for instant banking access rather than the slow wire-transfers used by competitors; a focus on phone support and customer service; a huge investment in security; and theft insurance for customer deposits.
It’s still unclear how Circle will actually make money, particularly given the free nature of their offerings. No details about this aspect of their business plan have been revealed, although there is certainly room in “free” services for marginal transaction fees and additional, fee-based services for professional users and clients. It’s also not clear how compelling users will actually find the service, particularly with more established competitors Coinbase and BitPay in the market already, and smaller startups like Xapo pitching many of the same features.